Originally posted at Capitalstool.
So Uncle Warren has bought a lot of Oxy.
A stock I recomended months ago.
Why????????
Well beside the oil price there is a very high J number on this stock
The J number (which I invented) quantifies in a mathematical way the wealth transfer from lenders of borrowers (i.e the common shareholders) due to inflation.
The FED is a monetary umpire. Unfortunately for Team Lender the FED is an umpire who now days only awards penalties to Team Borrower.
Thus making it very hard for team lender to ever win a game (note I think they won a few games back in the early 1930’s but thats about it).
Anyway the J number is 30B debt plus 8B in preference shares multiplied by CPI.
Or about $4 Billion a year that is being transfered to the borrowers from the lenders.
So to get his $800 million back per annum Uncle Warren has to buy about 20% of Oxy.
Should be fairly easy now he can exercise the warrants.
I think thats his plan.
Also you should note that inflation is driving Uncle Warren to use his cash pile.
Inflation is a tax on cash and its become too expensive to hang on to.
So he will spend it on stocks.
